Starting a Small Business
Raising Finance
This is a difficult subject for me to not get a bit 'chippy' about. How does one raise finance for an enterprise? A few years ago I wanted to expand my business. I had a good working model - proven. So I spoke to the bank first.
This was fairly pointless, as they were not prepared to put any money at all into my business expansion (not without me guaranteeing the loan with my house. I spoke to Business Link, who were all very interested in what I had to say, but essentially they were not able to Do anything about my desire to find investors etc.
The worst result was that they tried to get me to pay about £400 to be put on some Business Angel catalogue. I could barely believe how much of a scam this seemed to me. Why the hell should I pay £400 to be able to pitch my idea to a few supposed investors?
Is this the right attitude?
There seems to me to be a completely backwards attitude towards investment in small businesses here in the UK. They (banks and suchlike) do not seem to understand the fact that they actually depend upon small business; the whole economy is dependent upon small business; yet they will not share the tiniest bit of risk in the development of the business.
I would like to see an organisation that can work on a local level. In my region of Gloucestershire, I would call it say Gloucestershire Dragons; where people with experience, useful skills or money can easily see the ideas that entrepreneurs are putting forward.
I wouldn't dream of trying to charge 400 quid for people to pitch their idea - I find that repugnant! I am really very motivated towards doing this so am going to buy the domain name to do it.
I always listen to the podcasts of Peter Day from the BBC programme World Of Business. He is often in Silicon Valley in the US. It just amazes me the difference there is there in the attitudes towards new businesses. Without silicon valley, the United States would be practically bankrupt.
The can-do business attitude and the understanding of the importance and excitement of risk and venture is a billion miles and a hundred billion quid better than it currently is here in the UK. I want to change this situation.
We, in the UK need to flaming-well wake up to the fact that we are going to be relegated into the economic division that includes the like of Greece and Poland. And the main reason behind this is that the UK made its living from dodgy finance, fossil fuels and “defence” hardware.
All of these industries are going very badly wrong and the outrageous calamity that BP has precided over with the deep-water oil disaster has made the situation so much worse than it was before.
Clean start
It is time to make a clean start. We need to get smart and big in Clean, Greeen and ultra high-tech industries, and we need to start them up now. The irony is that some of the best investors in Silicon Valley are British!
And the companies there who have had investment are packed with highly talented British graduates and self-made geniuses. The Clean, Green markets are potentially enormous. IT and software is at the very core of clean, green tech.
Gloucestershire Dragons
If the Gloucestershrie Dragons idea takes off, I would make part of its constitution that economic ventures that capitalise from environmental destruction should be excluded from investment. Though I admire Richard Branson for his amazing skill at self-publicity, I cannot see how or why he can justify ventures such as the Virgin Galaxy space tourism. He claims that he's the new Green-Goddess, but I don't buy into it.
What we do have in the UK is a small percentage of people who are extremely wealthy. This is the Capital that needs to be tapped into before it is too late. This money would otherwise be going into financial products that end up supporting the Chinese high-pollution growth economy or unsustainable projects going on in the world.
Every day, the UK loses a British company to corporations from abroad. The Cadbury take-over was a disaster for the UK. Already the new owner Kraft has decided to shut down operations near Bristol and is now currently going to close down the Head-Office in Cheltenham.
This is what happens when corporations have no commitment to a community or country. There's not all that much left for the UK to flog-off, so let's start from scratch and build new companies and corporations that will not sell-out its staff in the UK built into the constitution of each of these companies.
Why Should Wealthy Individuals Invest In Local Small Businesses
Normally, I am not overly keen on the personality type of the typical tycoon. However, I was absolutely delighted to hear an in-depth interview with Warren Buffett, one of the wealthiest men on the planet.
What I found so refreshing about his attitude was that he knew that his success was based upon very fortunate circumstances e.g. if he were born in poverty in Bangladesh, then he would not have had the same success in life.
How refreshing to hear some modesty. So, in recognising a significant level of good-fortune in making a good fortune, why not help others to do the same......especially if those will also end-up reciprocating their successes again to the next generation.
There are also considerable tax advantages for those who are investing money into UK businesses as venture capital. Capital-gains tax and other fiscal incentives are available, which an accountant would be able to advise upon.
A venture capitalist or “business angel” will tend to be given a stakeholding in the venture that they are investing in. This process has obviously been made familiar by the television show Dragon's Den, whereby the Dragons negotiate for stakes normally around 50% for the liquidity (cash) that they inject into the business venture.